Exhibit 10.1
PRECISION CASTPARTS
CORP.
NONSTATUTORY STOCK OPTION
AGREEMENT
For SERP Level One and Level Two
Participants
THIS AGREEMENT is made as of the
“Grant Date”, between Precision Castparts Corp., an
Oregon corporation (the “Company”), and Optionee
(“Optionee”). Grant date, optionee name, number of
shares, and grant price are shown on the Notice of Grant of Stock
Option and Option Agreement furnished to each Optionee.
Pursuant to the Precision Castparts
Corp. 2001 Stock Incentive Plan (the “Plan”), the Board
of Directors has voted in favor of granting to the Optionee an
option to purchase Common Stock of the Company on the terms set
forth below. In consideration of the promises and mutual covenants
herein contained, the Company and the Optionee agree as
follows:
1. Grant . The Company hereby
grants to the Optionee upon the terms and conditions hereinafter
stated the right and option (the “Option”) to purchase
all or any part of an aggregate number of shares of the
Company’s authorized but unissued Common Stock at a grant
price. The Option is a Nonstatutory Stock Option and is not an
Incentive Stock Option, as defined in Section 422A of the
Internal Revenue Code, as amended. Under the conditions set forth
in paragraph 3, the Optionee’s right to exercise the Option
shall terminate and in substitution therefor the Optionee shall
have the right to exercise a stock appreciation right.
2. Terms of Option . The
Option is granted upon the following terms:
2.1 Duration of the Option .
Subject to reductions in the Option period as hereinafter provided
in the event of termination of employment or death of the Optionee,
the Option shall continue in effect for a period of ten
(10) years from the date hereof.
2.2 Time of Exercise . Except
as provided in paragraph 2.5, the Option may be exercised from time
to time beginning one year after the date hereof to the extent the
Option has become vested. Twenty-five percent of the shares subject
to the Option shall become vested one year after the date of this
Agreement and an additional 25% shall become vested each year
thereafter. If the Optionee does not exercise the Option in any one
year for the full number of shares to which the Optionee is
entitled, the rights shall be cumulative and the Optionee may
exercise the Option for such shares in any subsequent year during
the term of the option.
2.3 Limitations on Right to
Exercise . Except as provided in paragraph 2.5, the Option may
not be exercised unless at the time of such exercise the Optionee
is employed by the Company or any subsidiary of the Company and
shall have been so employed continuously since the date such option
was granted. Absence on leave or on account of illness or
disability under rules established by the Board of Directors shall
not, however, be deemed an interruption of employment for this
purpose.
2.4 Nontransferability . The
Option is nonassignable and non-transferable by the Optionee except
by will or by the laws of descent and distribution of the state or
country of the Optionee’s domicile at the time of death, and
is exercisable during the Optionee’s lifetime only by the
Optionee.
Precision Castparts Corp.
Nonstatutory Stock Option Agreement
Page 1
2.5 Termination of Employment;
Change of Control .
(a) In the event the employment of
the Optionee by the Company or by any parent or subsidiary of the
Company is terminated, other than in the circumstances specified in
subsection (b) or (c) below, the Option held by the
Optionee may be exercised at any time prior to its expiration date
or the expiration of six months after the date of such termination
of employment, whichever is the shorter period, but only if and to
the extent the Optionee was entitled to exercise the Option on the
date of such termination.
(b) (1) In the event the
Optionee’s employment is terminated because of death, the
Option held by the Optionee may be exercised with respect to all
remaining shares subject thereto, free of the vesting requirements
of paragraph 2.2, at any time prior to its expiration date or the
expiration of twelve months after the date of death, whichever is
the shorter period. The Option shall be exercisable only by the
person or persons to whom the Optionee’s rights under the
Option shall pass by the Optionee’s will or by the laws of
descent and distribution of the state or country of the
Optionee’s domicile at the time of death.
(2) In the event the
Optionee’s employment is terminated by retirement at normal
retirement age as defined under the provisions of the
Company’s Retirement Plan, the Option may be exercised with
respect to all remaining shares subject thereto, free of the
vesting requirements of paragraph 2.2, at any time prior to its
expiration date, the expiration of five years after the date of
such termination of employment, or the expiration of one year after
the date of death of the Optionee following termination of
employment, whichever period is shorter.
(3) If the Optionee’s
employment is terminated under conditions of early retirement as
defined under the provisions of the Company’s Retirement
Plan, the Option may be exercised at any time prior to its
expiration date or the expiration of twelve months after the date
of such termination of employment, whichever is the shorter period,
but only if and to the extent the Optionee was entitled to exercise
the Option on the date of termination.
(4) In the event of termination of
employment because of total disability, the Option may be exercised
with respect to all remaining shares subject thereto, free of the
vesting requirements of paragraph 2.2, at any time prior to the
expiration date of the Option or twelve months after the date of
such termination of employment, whichever is the shorter period.
The term “total disability” means a mental or physical
impairment which is expected to result in death or which has lasted
or is expected to last for a continuous period of 12 months or more
and which causes the optionee to be unable, in the opinion of the
Company and two independent physicians, to perform his or her
duties as an employee of the Company and to be engaged in any
substantial gainful activity. Total disability shall be deemed to
have occurred on the first day after the Company and the two
independent physicians have furnished their opinion of total
disability to the Company.
Precision Castparts Corp.
Nonstatutory Stock Option Agreement
Page 2
(5) In the event of termination of
employment for cause, the Optionee’s right to exercise the
Option shall immediately terminate and the Option shall be
forfeited. For these purposes, “cause” for termination
shall exist if the Optionee (i) has committed any act of
fraud, embezzlement, misappropriation, theft or any material
violation of the Company’s Code of Conduct in the course of
the Optionee’s employment; (ii) the Optionee has
violated any federal, state, foreign or local law, ordinance, rule
or regulation (other than minor traffic violations or similar
offenses) that is materially detrimental to the business,
reputation, or goodwill of the Company or a subsidiary of the
Company; or (iii) the Optionee has continually and
intentionally failed or refused to perform his or her assigned job
duties and responsibilities, and such failure or breach is not
cured within thirty (30) days after the Optionee is provided
with written notice specifically describing the asserted failure or
refusal. Notwithstanding other provisions of this Agreement, the
Company may suspend the exercisability of the Option during the
pendency of any investigation of whether cause exists to terminate
the Optionee’s employment.
(c) Acceleration in Certain
Events . Notwithstanding any other provisions of this
Agreement, a special acceleration (“Special
Acceleration”) of the Option shall occur and the Option shall
immediately become exercisable in full at any time when any one of
the following events has taken place:
(1) The shareholders of the Company
approve one of the following (“Approved Transactions”):
(A) any consolidation, merger or plan of exchange involving
the company (“Merger”) pursuant to which Common Stock
would be converted into cash; or
